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CGT on house sale due within 30 days

Practical Issues
Clitheroekid
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CGT on house sale due within 30 days

#277326

Postby Clitheroekid » January 14th, 2020, 12:19 pm

Very few people seem to be aware that as from 6 April this year any Capital Gains Tax that arises on a property sale is payable within 30 days of the disposal.

This is a massive acceleration of the payment date under the current rules, and I suspect that many people will be caught out by it.

https://www.lexology.com/library/detail ... &utm_term=

Dod101
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Re: CGT on house sale due within 30 days

#277334

Postby Dod101 » January 14th, 2020, 12:39 pm

It will not affect me but I see that it applies only to residential property and can be considered, according to the Brodies item you linked to, to be a provisional payment depending I suppose on whether by the time a tax return needs to be completed there might for example be a CGT loss to carry forward against it.

It sounds like ever more complexity to our tax system, and I guess it is really one for the conveyancing solicitor to advise on at the time of a sale where CGT arises otherwise, as you say, many who are in that position will almost certainly be caught out by it.

Dod

PinkDalek
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Re: CGT on house sale due within 30 days

#277365

Postby PinkDalek » January 14th, 2020, 1:57 pm

Dod101 wrote:It will not affect me but I see that it applies only to residential property ... It sounds like ever more complexity to our tax system, ...


Having been involved on a disposal of a part residential and part non-residential property (involving a NRCGT return for a non-resident where the 30 days window was in place earlier than for UK residents) you are indeed correct, it is complex, especially where valuations are necessary!

I'm certain the new payment regime has been discussed before on here but the ICAEW wrote this in their representations on the April 2018 Consultation:

9. The 30 day window is impractical for many taxpayers as has been evidenced by the non resident CGT (NRCGT) debacle and the number of penalty appeal cases being taken to the tribunal. Lessons need to be learned from the roll out of NRCGT about how to make sure taxpayers are aware of the change; First Tier Tribunal judges have been very critical of the way NRCGT was implemented and the information disseminated. Many taxpayers will not want to commission a valuation, even if they realise one is necessary[,] until after the sale is certain, so not until exchange making the 30 day window inadequate. and 10. We foresee several tribunal cases arising as a result of the change, for example where there are arguments over whether a disposal was of a residential property or not, whether private residence [relief] applied in full or not and the level of penalties charged as with the NRCGT regime. .

From https://www.icaew.com/-/media/corporate/files/technical/icaew-representations/2018/icaew-rep-64-18-capital-gains-tax-payment-window-for-residential-property-gains---payment-on-account.ashx


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